Roxas sets meet with NSC creditors

Trade and Industry Secretary Manuel Roxas II expects to convince creditor banks of the National Steel Corp. (NSC) to resolve pending issues which are delaying the rehabilitation and reopening of the beleaguered steel firm.

In a meeting he scheduled on May 7, Roxas hopes to get creditor banks of NSC to act on four major issues: A need to conduct an international tender for the sale or lease of the NSC plant assets; advances for the expenses to be incurred in the implementation of the memorandum of agreement (MOA), for the engagement of an investment banker who will undertake the international tender, and for expenses for the maintenance of the plant when NSC funds run out; the taxes, fees and other expenses related to the setting up of the special purpose vehicles (SPVs) and transfer of assets; and back taxes and related interests and penalties, as well as current taxes.

In a letter, Roxas reminded NSC’s creditor banks that the signing of the MOA in November 2002 "was a major step towards our ultimate objective of getting the plant operational."

"However, several residual issues remain unresolved," the DTI chief pointed out.

He warned creditor banks that "while it is understandable that a large non-performing account like NSC takes a lot of effort and patience to turn around, we also know that we cannot afford to wait for the resolution of all these issues and ignore the consequences of the continued deterioration of the plant."

Roxas has been working with NSC’s creditor banks since June 2001 for the resumption of the steel firm’s operations in Iligan City, Davao.

But since the signing of the MOA in November 2002, at least one creditor bank–Credit Agricole Indosuez, has backed out of the debt restructuring agreement and is instead asking the government to buy out its remaining exposure in NSC.

Roxas, however, is still optimistic that after the meeting on Wednesday, the French banking giant will reconsider its position and decide instead to stick with the original debt restructuring and rehabilitation plan for NSC.